New Reynolds LAW-553 contract forms
Halbert B. Rasmussen
Reynolds and Reynolds has just introduced a revised version of their "553" retail installment sales contract. The form was last revised in 2016, and Reynolds and Reynolds’ new "8/22" version has come out in both arbitration and non-arbitration versions, LAW®553-CA-ARB8/22 and LAW®553-CA 8/22. Reynolds and Reynolds noted that the revised forms contain the following changes:
- Removed Dealer Number, Contract Number, ROS number and Stock number fields from the top of the contract
- Modified spacing in various areas to allow for easier programming of data
- Added language to the physical damage insurance section
- Modified the Payment Schedule by adding blanks instead of "Monthly Beginning" and $ to the Amount of Payments column
- Itemization of Amount Financed Changes:
- Increased the length of the total lines
- Modified format of lines 1.A.3. and 1.A.4.
- Added 1.K. to accommodate an additional trade-in
- Modified format of lines 1.N. and 1.0.
- Modified line 3 to one line rather than two
- Removed instructional text from line 6.0
- Added 2 additional "Other" lines as 6.G. and 6.H.
- Updated reference lines as needed for the changes above
- Reduced the size of the blank box
- Added lines for printed Buyer and Co-Buyer names below signature lines
- Added name and title lines for Business Use transactions below the Buyer and Co-Buyer signature lines
- 1.b. — added "as the law allows" to the end of the section
- 2.d. — added new 3rd sentence to section
- 3 .b. — changed "on a" to "during" regarding the credit application and added a comma after damaged in the 4th bullet
- 3.d. — added "(such as a revised)" and deleted "at your expense"
- 6. — added and modified language in the SERVICING AND COLLECTION CONTACTS section
- 8 — changed "in" to "during" in WARRANTIES OF BUYER section
- Made additions, deletions and revisions to Arbitration Provision language on the ARB contract version
- Changed the format of the Assignment Box to make it easier to complete
Dealers should begin using the new contract on August 1, 2022. Translations for the 553-CA and 553-CA-ARB will be revised to reflect the same changes.
The use of a contract with an enforceable arbitration clause continues to be the best way to limit the resolution of disputes concerning the vehicle sale and resulting relationship to just two parties involved, the customer and the dealer. With updated arbitration language, the 553-CA-ARB is the clear choice for avoiding class action exposure.